Eye on China: EU Outreach – Poverty Goal – AI Patents – Tech Rules – Covid Origin – ‘Coopetition’ Offer

Eye on China is a weekly bulletin offering news and analysis related to the Middle Kingdom from an Indian interests perspective.

I. India-China Ties

It’s been a relatively quiet week. It’s still not clear when the next round of formal talks between military commanders will be held. But in the meantime, there are some comments worth noting. Senior Colonel Ren Guoqiang, spokesperson for China’s Ministry of National Defence, told the media this week that the two sides had been maintaining “candid and in-depth communication and coordination to promote disengagement in areas along the Line of Actual Control.” Indian armed forces veterans don’t seem to be as sanguine about these discussions. A number of them quoted in this piece by Imran Ahmed Siddiqui are cautioning India against vacating the heights in Chushul. Meanwhile, HT’s Sutirtho Patranobis reports that the PLA’s Western Theatre Command is said to be commissioning the J-16 fighter aircraft. He cites Global Times as reporting that “a brigade attached to the PLA WTC Air Force recently conducted a confrontational air-to-air combat exercise.” This process is likely to be completed by the end of the year.

Anyway, while these talks continue, the Indian government announced another ban targeting Chinese apps. Some 43 apps, including AliExpress and TikTok alternative Snack Video, have been banned now. Since tensions began in late April-early May, we’ve seen four rounds of bans. The first of these came in June 2020. Since then, India has blocked at least 220 Chinese mobile apps. New Delhi says that these apps are “prejudicial to sovereignty and integrity of India, defence of India, security of state and public order.” The Chinese embassy responded by saying that it “oppose(s) the Indian side’s repeated use of “national security” as an excuse to prohibit some Mobile APPs with Chinese background.” It demanded a “non-discriminatory” environment for all market players. China’s MoFA said that India should “immediately correct its discriminatory approach and avoid causing further damage to bilateral cooperation.” It added that the bans were a “glaring violation of market principles and WTO rules severely harm the legitimate rights and interests of Chinese companies.” Chinese analysts, meanwhile, argue that such a “tangled mindset (of bans while needing investment) will restrict India’s long-term development.” Fudan’s Lin Minwang also seems to agree with this argument.

The bans have, of course, hit Chinese companies. This FT piece has some reactions from these companies, along with their employees in India. It says that “Alibaba has laid off employees in the country and curtailed its ‘innovation initiatives’. Tencent returned the publishing rights for its hit game PUBG Mobile to its South Korean developer in an effort to get it unblocked. TikTok has not yet started lay-offs for its staff of roughly 2,000, but a person close to the company said morale was low.” While one might see these bans as imposing penalties on Beijing for its behaviour at the LAC, there needs to be deeper thought on the implications of such arbitrary policy measures. Apar Gupta and Mishi Choudhary’s comments in this Indian Express piece capture this sentiment well.

Meanwhile, Reuters reports that India’s tight control of quality clearances for electronic goods from China slowed the import of Apple’s new iPhone model last month and held up other products made by companies like Xiaomi. The report explains that applications to the Bureau of Indian Standards, which typically used to be processed within 15 days, are now taking up to two months or longer. BIS started delaying approvals in August for China-made imports of devices like smartphones, smartwatches and laptops. Bloomberg reports that the Indian government is subjecting foreign investment proposals from Hong Kong at par with China as part of a new policy that makes approval mandatory for plans from countries that share a land border. Nearly 140 investment proposals valued at over $1.75 billion, mostly from China and Hong Kong have apparently been put on hold pending scrutiny. The report adds that “a government panel constituted to approve these proposals is yet to decide on the rules including on beneficial ownership.” Another Bloomberg piece, this one about the potential impact of India’s RCEP exit on Indian exports. The argument it makes is that some of India’s top 10 exports such as engineering goods, chemicals, pharmaceuticals, and electronics face erosion in market share on account of lower tariffs that members of the 15-nation Regional Comprehensive Economic Partnership enjoy for trading among themselves.

Finally, Joe Biden’s candidate for Secretary of State, Antony Blinken, spoke about India and China this week. Blinken wants India to be a key partner in dealing with China from a position of strength. “We have a common challenge which is to deal with an increasingly assertive China across the board, including its aggression toward India at the Line of Actual Control, but also using its economic might to coerce others and … to its advantage, ignoring international rules to advance its own interests, asserting unfounded maritime and territorial claims that threaten a freedom of navigation in some of the most important seas in the world,” he said at an event titled US-India Relations and Indian Americans in Joe Biden Administration. He also said: “We would work together to strengthen India’s defence, and also add its capabilities as a counterterrorism partner.” The Indian Prime Minister was the 12th world leader that Biden called after announcing his victory. Anyway, here’s Pan Guang, Director of Shanghai Cooperation Organization Research Center at the Shanghai Academy of Social Sciences, talking about the possibility of the Quad becoming an “Asian NATO.” He says that “India just wants to keep its feet in two boats, and Japan is unwilling to destroy Sino-Japanese relations.” On Australia, he believes that cutting off economic ties with China will be impossible.

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